Honeywell has high hopes for Quantinuum, the quantum computing company it recently helped create, and in which it holds a majority equity stake. Expectations are high enough that Honeywell already accelerated its revenue projections for Quantinuum, saying recently that the new firm could reach about $2 billion in sales by 2026, a year earlier than the projection Honeywell provided when Quantinuum officially launched last November.
The statement was made by Honeywell Chairman and CEO Darius Adamcyzk on the industrial giant’s fourth quarter 2021 earnings call earlier this month. Quantinuum resulted from the spin-off of Honeywell’s quantum computing solutions division and the merger of that business with U.K.-based Cambridge Quantum Computing. That deal was completed in November 2021, and soon after Quantinuum launched its first offering, a cryptographic encryption key generator called Quantum Origin.
According to a Motley Fool transcript of the earnings call, Adamcyzyk said, “With the introduction of Quantum Origin, which is already serving Fortune 500 customers today, we expect Quantinuum to reach approximately $2 billion of sales by 2026, one year earlier than the estimate we provided in our leadership webcast back in November.”
This is a much higher figure than other companies in the sector are expecting for the same year. For example, Rigetti Computing, which is in the process of merging with special purpose acquisition company Supernova Partners II in order to go public, said at an investor conference last month that it is projecting to achieve about $600 million in revenue by 2026. Another publicly-traded quantum firm, IonQ, said late last year that it expects more than $500 million in revenue by 2026. IBM, perceived as a sector leader, has not recently discussed specific revenue projections for its own quantum efforts after vocally hyping the sector for much of last year.
The year 2026 is significant not only as a five-year projection target, but also because many quantum companies expect that they will be able to demonstrate quantum advantage, or the ability for a quantum computer to process a real-world problem faster than a classical computer, sometime between 2023 and 2025. For Quantinuum’s part, the company recently told Omdia that quantum advantage could be achieved in an element of computational chemistry “within the next 18 to 24 months.”
In reporting that information, Jonathan Cassell, principal analyst, advanced computing at Omdia, further wrote, “For organizations evaluating quantum technology and strategies, the implication of the developments at Quantinuum is clear: QC [quantum computing] has already arrived on the scene and is starting to have significant business impacts. This is occurring despite the fact that full-scale quantum computers are not set to arrive on the scene for several years.”
Indeed, Quantinuum has started to climb the $2 billion mountain. During a Q&A session with analysts after Honeywell’s earnings presentation, Adamcyzk said he is expecting Quantinuum to reach about $20 million in revenue for 2022, which is a little more in line, but still higher, than other companies are projecting for their quantum fortunes. It also shows how sharply and quickly Honeywell expects Quantinuum sales to ramp in the following four years.
It could take a great deal of investment to make that happen. As part of the merger to create Quantinuum, Honeywell already committed a $270 million investment in the new firm, and during the earnings call Adamcyzyk also said that during 2022 Honeywell will invest “$150M of net P&L investment” that is not part of the original $270 million investment.